ALLEGIANCE TELECOM APPLAUDS FCC FOR HISTORIC TELECOM DECISION

Congratulates Bell Atlantic-New York For Its Substantial Progress

DALLAS, TX, December 22, 1999 - Allegiance Telecom, Inc. (Nasdaq: ALGX), a competitive local exchange carrier (CLEC), applauded the Federal Communications Commission today for its historic decision to grant approval for Bell Atlantic-New York's application to provide in-region long distance service in New York. Bell Atlantic is the first Regional Bell Operating Company (RBOC) to receive such approval.

"These decisions by the FCC and the New York Public Service Commission (PSC) represent an historic milestone in the development of a competitive telecommunications market and set a good national standard for compliance with the Telecommunications Act of 1996," said Royce J. Holland, chairman and chief executive officer of Allegiance Telecom. "This decision also provides further evidence that the Telecom Act is working and further highlights the ridiculous nature of the RBOCs' repeated efforts to bypass the Act in the courts and in Congress. The FCC's message today is clear -- quit whining and open your monopoly markets to competition."

Allegiance has worked front and center with Bell Atlantic-New York in order to help the RBOC bring itself closer to compliance. Allegiance's work with the New York-PSC, KPMG Peat Marwick and Bell Atlantic-New York began in earnest in June 1998 and eventually led to the establishment of the nation's first operational electronic ordering interface for local service orders, as well as new hot cut procedures, and, for the first time, large scale teamwork between a CLEC and an RBOC.

"Allegiance employees not only identified key areas of deficiency in Bell Atlantic-New York's performance, but they took the important step of assisting Bell Atlantic-New York in refining its processes and procedures," said Robert McCausland, Allegiance's vice president of regulatory and interconnection. "Allegiance's work with Bell Atlantic-New York combined with the unparalleled efforts of the NY-PSC and KPMG Peat Marwick clearly enabled Bell Atlantic-New York to see first hand its non-compliances and provided the groundwork for the RBOC's eventual approval. Undeniably, the NY-PSC has established an appropriate standard for any RBOC to meet as it approaches compliance with the Act. This standard puts to shame the frivolous applications of RBOCs in Louisiana and Oklahoma."

Allegiance commended the FCC's use of key aspects of Allegiance's anti-backsliding framework (February 2, 1999) that provides an extra level of ongoing enforcement to ensure that Bell Atlantic-New York does not regress in future performance.

"We are especially pleased that the FCC has highlighted the need for strong post-271 enforcement and anti-backsliding provisions," said Holland. "In fact, Chairman Kennard specifically addressed the authority of the FCC to suspend Bell Atlantic's ability to sign up new long distance customers if they backslide."

Allegiance also applauded Bell Atlantic-New York's recent move to establish a separate operating unit to sell high-speed data connections including digital subscriber line (DSL) technology in New York in order to improve access to local loops for competitors like Allegiance.

Based in Dallas, Texas, Allegiance Telecom is a facilities-based competitive local exchange carrier that offers businesses a complete package of telecommunications services, including local, long distance, international calling, high-speed data transmission and Internet services. The Company is targeting 24 major metropolitan areas in the U.S. with its "one-stop shopping" approach. Allegiance is currently operational in 19 markets, including Atlanta, Baltimore, Boston, Chicago, Dallas, Detroit, Fort Worth, Houston, Long Island, Los Angeles, New York, Northern New Jersey, Oakland, Orange County, Philadelphia, San Diego, San Francisco, San Jose and Washington D.C.

The Company's web address is: http://www.allegiancetele.com/. Allegiance's common stock is traded on the Nasdaq National Market under the symbol ALGX.

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